]]>A New and Renewed Focus at Quality Ingredientshttps://www.qic.us/shrinking-a-small-firm-can-be-the-right-plan/
Wed, 10 Sep 2014 20:54:06 +0000https://www.qic.us/?p=347Quality Ingredients of Burnsville is just a fraction of the size it was a year ago, but there’s nothing amiss. It’s smaller today because that was the plan.
It was about a year ago that Quality Ingredients sold by far its biggest business. Since then the management team has been busy getting reacquainted with the much smaller business it kept – and liking what it’s learned. A year after the divestiture, CEO Isabelle Day said she wouldn’t change a thing.

]]>Quality Ingredients of Burnsville is just a fraction of the size it was a year ago, but there’s nothing amiss. It’s smaller today because that was the plan.

It was about a year ago that Quality Ingredients sold by far its biggest business. Since then the management team has been busy getting reacquainted with the much smaller business it kept – and liking what it’s learned. A year after the divestiture, CEO Isabelle Day said she wouldn’t change a thing.

Because growth is so deeply embedded in the culture of American business, it’s important to understand why managers on their way to $75 million in revenue made a good call when the deal left them in charge of a $15 million business.

Selling the biggest part of the company wasn’t for the usual reasons. There was, for example, no founder to be bought out. An employee stock ownership plan took care of that years ago.

The company didn’t need the money. It had the cash in the bank to fund an expansion at its Burnsville plant even before it proceeded to sell its much larger business in Marshfield, Wis. That’s because both businesses made money.

“It’s definitely not a story of anything being broken,” Day said. “I know a lot of companies, particularly small companies, can get emotionally attached to their businesses, particularly when they are doing well. Why would you ever sell? Well, sometimes it can be the best thing for the business.” Quality Ingredients had the luxury of having options only because the operation had been turned around after Day got there in 2005, when the company was not quite 20 years old.

The company got its start to make powdered ingredients for coffee creamers and shortening powder, and it still makes ingredients for food products, always in powder form. Its powders may also go into dietary supplements like those sold at GNC outlets.

Day started the turnaround in 2005 inside the four walls of Quality Ingredients’ buildings, by improving operations. Her first step was introducing common business measurements into what had been very much a mom-and-pop company.

The performance of the company improved, with both Burnsville and Marshfield, a plant acquired in 1999, turning consistently profitable. But several years ago Day reached the conclusion that the company was really two very different businesses, not one.

The smaller facility in Burnsville was a contract manufacturing operation, making powdered ingredients for customers to precise specifications.

Because the customers continue to own the raw materials, Quality Ingredient’s Burnsville “tolling business” is really a service business. Its competitive advantage is built on its expertise in quickly making and delivering small quantities of multiple powdered ingredients, along with customer service.

Marshfield was more of a production operation, of ingredients sold under the Quality Ingredients brand for nondairy creamers and other products. Unlike the growing market opportunity for the Burnsville business, the Marshfield business sold into a market that was growing no faster than the overall economy.

It was also a highly concentrated little niche, with the top two players owning about three-quarters of the market. Quality Ingredients sat back in the fourth position. It was doing well, but “looking ahead, we started to see more long-term risk than long-term opportunity,” said Bruce Boyea, and company’s CFO and a member of its board.

Day and Boyea decided that the Marshfield business would be better off if they struck a deal with the No. 3 player, a private company based in Missouri that operated under the name SensoryEffects.

“People said it feels like we are giving away our child,” Day said. “No we were not. We were positioning our child for long-term success. We wanted what was best for that business.”

Because Quality Ingredients is owned by employees in an ESOP, the potential sale had to be put to a vote. Management got the overwhelming approval to go ahead with the sale.

Most of the sale proceeds were used to buy back about two thirds of the shares, owned primarily by folks who were going to work for SensoryEffects. Day declined to discuss specifics, but noted that employees in the ESOP in 2005 made more than 10 times their money.

The day after closing, Quality Ingredients had a $15 million a year operation in Burnsville that, as Boyea said, “kind of seemed to be growing on its own without a lot of resources or attention.” That’s when they found out, Day said, “that we didn’t know as much about this business as we thought we did.”

Day said she and her colleagues knew their industry had lots of small players splitting the market, but in the past year they’ve been amazed to encounter competitors they hadn’t even heard of before.

Day also said that a year ago she hadn’t fully realized just how much innovation was going on in the market. There are lots of upstarts and entrepreneurs, some in food but many others in the market for dietary supplements. Many of the entrepreneurs have backgrounds in food science or marketing and will need the help of Quality Ingredients to get their products manufactured.

As Day talked about the potential for growth, it’s clear there’s no second divestiture in her plans.

An ESOP-owned company has similar obligations to a public company in that it has to carefully consider a legitimate purchase proposal, and “I actually had somebody put out an offer on the table,” she said. “And I said, ‘There is no way I can look the employees in the eyes, with all the things we’ve got going on, and say we would be better off taking it.’

“Given what we believe we can do in this business, why would we give that up?” she added. “It would have to be an incredible offer.

Quality Ingredients Corporation expands production to meet growing demand for Contract Spray Drying Services Specialized spray drying equipment doubles capacity in Minnesota facility Quality Ingredients Corporation is pleased to announce the completion of its expansion to double capacity for specialized spray drying of food and nutritional ingredients in its Burnsville, Minnesota location. The expansion provides both greater capacity and flexibility to meet growing demand for highly specialized processing of custom ingredients, and leverages the company’s expertise in precision drying technology and encapsulation. Two new customized dryers, each installed in isolated facilities, offer customers flexible contract spray drying services for sophisticated, specialized projects ranging from colors and flavors to nutritional ingredients for functional foods.

“As consumers increasingly seek functional ingredients in the foods they eat, our customers – food manufacturers – increasingly need partners who can encapsulate these sensitive, high-value ingredients and make them shelf stable,” notes Isabelle Day, Quality Ingredients Corporation’s CEO. “Everything from the right healthy oil to a volatile natural color or flavor in liquid form must be carefully dried to precise specifications to meet their needs and, ultimately, consumer expectations.”

Bob Freemore, Chief of Operations for the company is excited about the capabilities the additional equipment offers. “Customers have raised the bar concerning the caliber of precision and skill they seek from food ingredient suppliers. Fewer and fewer providers of contract spray drying services are truly up to the challenge. With our SQF certification, a highly experienced scientific and engineering team, and now these new, isolated dryers, we are poised to be one of the few companies who can provide such specialized service,” notes Freemore.

The company expects further growth as it tailors its capabilities and operations to meet changing market requirements. “The combination of the right equipment and the right team of scientists, engineers and operators enable us to earn the trust and confidence of our customers, and we stand ready to support them as their needs change,” said Day.

About Quality Ingredients Corporation

Celebrating more than 25 years of service to the food and nutrition industries, Burnsville, Minnesota-based Quality Ingredients is a 100% Employee Stock Ownership Plan (ESOP) company leveraging expertise in spray drying technology to create proprietary and custom powdered ingredient systems as well as contract spray drying and blending services for food processing companies across North America and beyond.

]]>Quality Ingredients Expands Toll Manufacturing Capabilitieshttps://www.qic.us/quality-ingredients-expands-toll-manufacturing-capabilities/
Wed, 11 Sep 2013 20:55:10 +0000https://www.qic.us/?p=345With the addition of two small tower dryers in isolated suites, Quality Ingredients Corporation has expanded its toll manufacturing capability and capacity to serve customers needing smaller runs of specialized powders.
Operated by experienced engineers who follow careful process protocol to ensure consistent results on every run, these towers complement the existing capability and offer a unique platform to dry flavors, colors and specialized nutritional ingredients. Contact us for more information about all of our services and to learn what ...

]]>With the addition of two small tower dryers in isolated suites, Quality Ingredients Corporation has expanded its toll manufacturing capability and capacity to serve customers needing smaller runs of specialized powders.

Operated by experienced engineers who follow careful process protocol to ensure consistent results on every run, these towers complement the existing capability and offer a unique platform to dry flavors, colors and specialized nutritional ingredients. Contact us for more information about all of our services and to learn what we can do for you.

]]>Quality Ingredients Corporation Completes Sale of Wisconsin Planthttps://www.qic.us/quality-ingredients-corporation-completes-sale-of-wisconsin-plant/
Tue, 03 Sep 2013 21:37:27 +0000https://www.qic.us/?p=353BURNSVILLE, MN (September 3, 2013)
Quality Ingredients Corporation has completed the sales of its Marshfield, Wisconsin facility and related dairy and non-dairy creamer business to SensoryEffects®, based in St. Louis, Missouri. Both Quality Ingredients and SensoryEffects will be working together to insure a smooth transition for customers and employees. The parties closed the transaction on Friday, August 30.
Quality Ingredients Corporation will now focus solely on its fast-growing contract manufacturing and specialty products divisions, based at the Burnsville, Minnesota headquarters ...

Quality Ingredients Corporation has completed the sales of its Marshfield, Wisconsin facility and related dairy and non-dairy creamer business to SensoryEffects®, based in St. Louis, Missouri. Both Quality Ingredients and SensoryEffects will be working together to insure a smooth transition for customers and employees. The parties closed the transaction on Friday, August 30.

Quality Ingredients Corporation will now focus solely on its fast-growing contract manufacturing and specialty products divisions, based at the Burnsville, Minnesota headquarters facility.

About Quality Ingredients Corporation

With more than 25 years of service as an ingredient manufacturer to the food industry, Burnsville, Minnesota-based Quality Ingredients Corporation is a 100% Employee Stock Ownership Plan (ESOP) company leveraging expertise in spray drying technology to provide precision contract spray drying and blending services as well as to create specialty and custom powdered ingredient systems for food and nutrition industry partners across North America and beyond.

]]>Quality Ingredients Corporation to Sell Wisconsin Planthttps://www.qic.us/quality-ingredients-corporation-to-sell-wisconsin-plant/
Tue, 13 Aug 2013 21:42:53 +0000https://www.qic.us/?p=358Burnsville, Minnesota headquarters to focus on specialty powders, toll manufacturing
BURNSVILLE, MN (August 13, 2013) Quality Ingredients Corporation has entered into an agreement to sell its Marshfield, Wisconsin facility and related dairy and non-dairy creamer business to SensoryEffects®, based in St. Louis, Missouri, to be integrated into its SensoryEffects® Powder Systems division based in Defiance, Ohio. Quality Ingredients Corporation will now focus solely on its growing contract manufacturing and specialty products division, based at the company’s headquarters in Burnsville, Minnesota. ...

BURNSVILLE, MN (August 13, 2013) Quality Ingredients Corporation has entered into an agreement to sell its Marshfield, Wisconsin facility and related dairy and non-dairy creamer business to SensoryEffects®, based in St. Louis, Missouri, to be integrated into its SensoryEffects® Powder Systems division based in Defiance, Ohio. Quality Ingredients Corporation will now focus solely on its growing contract manufacturing and specialty products division, based at the company’s headquarters in Burnsville, Minnesota. Both companies are moving swiftly to provide customers all necessary information to ensure a seamless supply chain transition.

Further information will follow upon the close of the sale, expected on August 30, 2013.

About Quality Ingredients Corporation

With more than 25 years of service to the food industry, Burnsville, Minnesota-based Quality Ingredients Corporation is a 100% Employee Stock Ownership Plan (ESOP) company leveraging expertise in drying technology to provide specialized toll drying and blending services as well as create specialty and custom powdered ingredient systems for food and nutrition industry partners across North America and beyond. Please contact Valorie Klemz at VKlemz@qic.us for more information.

About SensoryEffects® Powder Systems

SensoryEffects Powder Systems is a developer and manufacturer of specialty powder ingredients and turn-key food products. Using the latest powder processing technologies, we customize solutions that meet our customer’s sensory and processing requirements. The business headquartered in Defiance, Ohio, has development labs and kitchens, pilot plants and commercial scale assets to collaborate with customers to solve their most difficult food and beverage development needs.

About SensoryEffects®

SensoryEffects is a supplier of customized food and beverage ingredients and products with three business units: SensoryEffects Powder Systems in Defiance, Ohio, SensoryEffects Flavor Systems in Bridgeton, Missouri, and SensoryEffects Cereal Systems in Lincoln, Nebraska. Please contact Tiffany Pailer at tiffany.pailer@sensoryeffects.com or visit www.sensoryeffects.com for more information.

]]>Quality Ingredients Corporation named Manufacturer of the Year 2013https://www.qic.us/quality-ingredients-corporation-named-manufacturer-of-the-year-2013/
Fri, 12 Apr 2013 21:52:30 +0000https://www.qic.us/?p=360Quality Ingredients Corporation, a leader in the food ingredient supplier industry, is honored to be named Manufacturer of the Year 2013 by the Manufacturers Alliance association in Minnesota in the medium size company category. The association makes its awards to companies who demonstrate exemplary willingness to share expertise and experience with other manufacturers, enabling continuous improvement across the entire manufacturing spectrum of industries.
Quality Ingredients Corporation has long had a focus on continuous improvement, and began its lean manufacturing journey ...

]]>Quality Ingredients Corporation, a leader in the food ingredient supplier industry, is honored to be named Manufacturer of the Year 2013 by the Manufacturers Alliance association in Minnesota in the medium size company category. The association makes its awards to companies who demonstrate exemplary willingness to share expertise and experience with other manufacturers, enabling continuous improvement across the entire manufacturing spectrum of industries.

Quality Ingredients Corporation has long had a focus on continuous improvement, and began its lean manufacturing journey upon the arrival of Robert St. Louis, Chief of Operations, in 2011. Lean manufacturing connects continuous improvement with value, defined as any action or process that a customer is willing to pay for. “The goal is to preserve value with less work, ensuring that all of our efforts are directed at activities that matter to our customers,” said St. Louis. “Sharing our experiences with the wider Manufacturers Alliance network helps us grow and improve, and in turn helps
others seeking similar gains in their organizations. It’s a win-win.”

Isabelle Day, CEO of Quality Ingredients Corporation reinforces the benefits of sharing experiences and information. “We increasingly compete in a global environment; it is important that manufacturing in the United States and in Minnesota grow stronger and more competitive every day. As a mid-size company, we especially recognize the critical role that a strong network of outside resources can play in helping us to grow stronger and more competitive. It is our honor to receive this award for sharing our own experiences and insights that may assist other manufacturers in their own pursuit to operational excellence.” Established more than 20 years ago, the Alliance now has over 300 member companies and represents a wide cross-section of Minnesota manufacturing. St. Louis believes that there has never been a better time to connect with other leaders in manufacturing, noting that “standards are getting higher and economic pressure is growing. We have to be sure that everything we do makes a difference for our customers.”

About Manufacturers Alliance

For more than twenty years, the Manufacturers Alliance (MA) association in Minnesota has provided over 300 local manufacturers with practical peer-to-peer education, training, networking and resources, enabling manufacturers to help each other in non-proprietary ways to improve universal processes.

]]>Quality Ingredients Corporation Kicks Off Two-year Training Initiativehttps://www.qic.us/quality-ingredients-corporation-kicks-off-two-year-training-initiative/
Thu, 21 Feb 2013 20:39:06 +0000https://www.qic.us/?p=779Minneapolis, February 21, 2013—Quality Ingredients Corporation, a Burnsville-based food ingredient supplier, has partnered with Dakota County Technical College (DCTC) on a two-year training initiative. DCTC will provide technical skills training to 55 existing and 20 new employee-owners working in Minnesota, thanks to a Minnesota Job Skills Partnership (MJSP) Grant in the amount of $115,332.
Quality Ingredients Corporation is one of the largest 100% ESOP (employee stock ownership plan) companies in Minnesota, and places a priority on employee-owner development and continuous ...

]]>Minneapolis, February 21, 2013—Quality Ingredients Corporation, a Burnsville-based food ingredient supplier, has partnered with Dakota County Technical College (DCTC) on a two-year training initiative. DCTC will provide technical skills training to 55 existing and 20 new employee-owners working in Minnesota, thanks to a Minnesota Job Skills Partnership (MJSP) Grant in the amount of $115,332.

Quality Ingredients Corporation is one of the largest 100% ESOP (employee stock ownership plan) companies in Minnesota, and places a priority on employee-owner development and continuous improvement. With their expertise in spray drying technology, the company transforms liquids into stable powders for the food and nutrition industries. A recent expansion reflects their strong growth; they are in the process of adding 20 new positions in their Burnsville, Minnesota facility as the company doubles its capacity there. “This grant is a wonderful validation of our efforts to make development opportunities available to every employee-owner, and our intent to make our operation better and better every day,” says Isabelle Day, CEO of Quality Ingredients Corporation. “Our partnership with DCTC brings us the customized training support we need for our rapidly growing team. We are delighted to receive this grant!”

“We are pleased to provide this critical training for Quality Ingredients as they expand operations,” said Patrick McQuillan, DCTC Dean of Continuing Education and Customized Training. “We have extensive experience working with food manufacturers, which is valuable as we customize training to match QIC’s processes.” A portion of the training is developed for hybrid delivery, with theory delivered in an online format and labs delivered on site. “Maintenance staffing tends to run very lean for manufacturers, which doesn’t leave a lot of time to schedule everyone for face-to-face training,” McQuillan said. “This grant will allow us to develop a Systems Troubleshooting course in hybrid format. We are working toward this goal for all of our mechatronics training offerings.”

The official grant signing takes place at the Quality Ingredients Corporation headquarters on Thursday, February 21, and training is expected to begin in the 2nd quarter of 2013. The company is also pursuing a similar training grant for its Marshfield, Wisconsin-based employee-owners through the Workforce Advancement Training Grant (WATG) program of Wisconsin.

Celebrating more than 25 years of service to the food industry, Burnsville, Minnesota-based Quality Ingredients is a 100% Employee Stock Ownership Plan (ESOP) company leveraging expertise in drying technology to create proprietary and custom powdered ingredient systems as well as contract spray drying and blending services for food processing companies across North America and beyond. Please visit www.qic.us for more information.

About DCTC

DCTC’s Customized Training staff members are experienced in grant administration. Over the past 20 years, DCTC has received and executed tens of millions of dollars in local, state and federal grants to support workforce development in Minnesota. Since 2000, Dakota County Technical College has partnered with over 60 Minnesota businesses administering more than $12 million in MJSP training grants.

Dakota County Technical College’s Customized Training division specializes in offering training and consulting services in the following areas: Business & Management, Computers & Technology, Health Care, Manufacturing & Trades and Transportation & Safety. DCTC guides companies through comprehensive training and development programs that bridge all work types and positions – enabling employers to provide a cross-company/cross-department focus and message, with the flexibility of using multiple formats.